Organizational excellence – Role of management by (…)

January 24, 2011 at 10:23 am | Posted in Blogroll, Organizational Excellence, Self Improvement | Leave a comment

In the later part of last century there was a lot of hype about “Management by …”. The three prominent ones were,

  • Management by objectives
  • Management by exception
  • Management by walking around

 The basic principle behind Management by Objectives (MBO) is for employees to have a clear understanding of the roles and responsibilities expected of them. They can then understand how their activities relate to the achievement of the organization. MBO also places importance on fulfilling the personal goals of each employee. But as Peter Drucker said “It’s just another tool. It is not a great cure for management efficiency”. As per him, managers should avoid the “activity trap”, getting so involved in their day to day work that they forget the main goal or objective of their work. MBO also introduced the concept of SMART (specific, measurable, achievable, realistic, time-related).

As per definition, Management by Exception is a “policy by which management devotes it’s time to investigating only those situations in which actual results differ significantly from planned results. The idea is that management should spend its valuable time concentrating on the more important items”. Focus on exceptions helps to get an early warning signal and identify the root cause to eliminate such occurrences in future.

Managing by walking around was popularized by Tom Peters and Robert Waterman in the early 1980s because it was felt that managers were becoming isolated from their subordinates. As per W. Edwards Deming, “If you wait for people to come to you, you’ll only get small problems. You must go and find them. The big problems are where people don’t realize they have one in the first place.”

It is important to understand the benefits of each tool and use the right one for a right situation. To me the importance of MBO is focus on the purpose or objective of whatever we do, which should not get lost as we get bogged down by the pressures of carrying out the day to day activities. Focus on exceptions helps to pick out improvement opportunities provided by things which are not going as they should. Walking around helps to get in touch with the ground realities, build rapport with people and catch the problems even before they become apparent to the persons concerned.

Each of us tends to stick to one of the management approaches that suits us or we are comfortable with. It is good to expose ourselves to other approaches as well so that we can see the benefits first hand and choose to use them when appropriate. If each manager in an organization goes through this and enriches his tool-kit, it will help the organization to reach a higher level of excellence.

I would really appreciate any thoughts / experiences from you that either support or challenge what is said above.


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